Markets & Finance

On the Move: Sanofi, British Airways, Arcelor

November 03, 2005

From Standard & Poor's European MarketScope

France

TOTAL (TOT) was up €0.80 to €217.10. The company announced third quarter adjusted net income of €3.13 billion, up 32%, vs. expectations of €2.8 billion-€3.1 billion; adjusted EPS of €5.32, up 36%. Adjusted operating income from business segments came in at €6.346 billion, up 41%, versus expectations of €6.3 billion. The company continues to buy back shares. In October, it bought back 1.6 million for €340 million, taking year to date level of buybacks to 2.7% of capital.

SANOFI-AVENTIS (SNY) was up €0.40 to €67.00. The company's blood-thinning drug Plavix can cut the risk of repetitive heart attack and stroke by 9% if taken with aspirin as an emergency treatment, according to an article due to be published in Saturday's The Lancet. The report suggests adding Plavix to aspirin led to a 7% reduction in deaths alone. Morgan Stanley said the divergence between U.S. and EU pharmaceutical stocks is continuing. The broker continues to prefer the company and Novartis, rating both overweight.

ARCELOR was down €0.40 to €19.76. The steelmaker fell after Australian steelmaker stocks dropped overnight. Bluescope issued a profit warning and plunged 14.5%. Peers Onesteel and Smorgan Steel Group also fell. Meanwhile, Spanish peer Acerinox missed forecasts, saying net profit after minorities came in at €196.24, down 19.2%, and had been expected to fall by 17%.

Switzerland

CONVERIUM was down CHF0.50 to CHF12.30. The company said that based on an internal review it plans to restate its financial account and will delay the release of third quarter results originally scheduled for November 8 until mid-December, together with the full set of restated results. It said the review should not reduce unaudited shareholders equity of US$1.65 billion reported for June 30.

Italy

ALITALIA was up €0.14 to €6.40. Capitalia and Unicredito have given their ok to support the company's capital hike, reported Finanza & Mercati. Reminder: Banca Intesa, Deutsche Bank and other ten banks are set to guarantee the company 's capital hike, according to the Italian press. The deal is expected to be completed by the weekend, ahead of the company's Monday board meeting.

Germany

ADIDAS was up €1.43 to €145.9. The company priced shares at €143 raising €648 million to help finance the planned US$3.8 billion acquisition of Reebok. The company sold some 4.5 million shares - 10% of its outstanding share capital - to institutional investors. On the broker front, ABN Amro (ABN) cut its price target to €188 from €191 and reiterated the buy rating.

PUMA was up €5.32 to €226.56. The sportswear outfit lifted its profit forecast as third quarter topped estimates, coming in at €91.9 million, on quarterly sales of €536.4 million, also above forecasts. The company raised its profit forecast, seeing earnings rising by a high single-digit percentage figure.

RWE was up €1.64 to €56.28. In a statement the company said it is selling its UK and US water companies, as expected, either by an initial public offering or a sale to financial investors. The company plans to focus on its core electricity and gas business.

Nordics

SECURITAS was down SEK5.50 to SEK117.00. Operating profit landed at SEK1.134 billion vs. SEK1.071 billion in third quarter 2004, with an operating margin of 6.7% (down from 7.1% year-over-year). Net profit amounted to SEK725 million vs. SEK677 million in the previous year, leading to EPS of SEK1.95, up 8% year-over-year.

Spain

ACERINOX was down €0.20 to €10.65. UBS lowered its target price to €9.20 from €10, and kept its reduce rating. The company posted nine month net profit after minorities of €196.24, down 19.2%. It had been expected to fall by 17%. The steelmaker said the reduction of the stainless steel consumption became more pronounced in third quarter due to high raw material prices and high inventory levels.

United Kingdom

BRITISH AIRWAYS (BAB) was down £0.07 to £3.07. Merrill Lynch reiterated its buy rating and £3.70 target, saying numbers exceed forecasts. The company reported second quarter pre-tax profit of £241 million, -17.74% (first half £365 million); operating profit £261 million, +6.5%; operating margin 11.8% vs. 12% in second quarter04; revenue £2.20 billion, 8.2%. it said it assumes continued stable economies and a rational capacity environment. Some yield improvement is now expected for this financial year.

BSKYB was down £0.25 to £5.02. The company reported first quarter revenue of £1.023 billion, +8%; gross margin 61%; operating profit £215 million, +14%; operating margin 21%; Pre-tax profit £140 million, +15%; EPS 7.5p, +19%. It said results were positive despite facing a challenging competitive environment and continued economic pressures on consumers. The outfit said it remains on track for 2005 and 2010 targets.

SCOTTISH & NEWCASTLE was up £0.05 to £4.84. The brewer said nine months performance is on track with robust results. The company is confident it will meet market expectations for 2005.

AUTONOMY was up £0.81 to £4.02 on news that it is to buy Verity (VRTY) for US$500 million. The company will seek to raise £1.53 million, through a 1-for-2 rights issue to partially fund the transaction. Verity stockholders will receive US$13.50 in cash for each outstanding Verity share. Prepared by Zaida Espana, Michael Sanderson, Mariella Mongio, Alexander Wisch, Holly Cook, Emma Stevenson, Pawan Girglani, and Rocio Opazo-Aniotz (Standard & Poor's); Alex Halperin (BusinessWeek Online)